Creating Resourses for Empowerment in Action (CREA), New Delhi v. DIT(E), New Delhi

ITA 4212/DEL/2009 | 2009-2010
Pronouncement Date: 31-03-2011 | Result: Allowed

Appeal Details

RSA Number 421220114 RSA 2009
Assessee PAN AAATC2961Q
Bench Delhi
Appeal Number ITA 4212/DEL/2009
Duration Of Justice 1 year(s) 5 month(s) 3 day(s)
Appellant Creating Resourses for Empowerment in Action (CREA), New Delhi
Respondent DIT(E), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 31-03-2011
Date Of Final Hearing 22-03-2011
Next Hearing Date 22-03-2011
Assessment Year 2009-2010
Appeal Filed On 28-10-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH C DELHI ] BEFORE SHRI C. L. SETHI JM AND SHRI K. D. RANJAN AM I. T. APPEAL NO. 4212 (DEL) OF 2009 ASSESSMENT YEAR : ----. CREATING RESOURCES FOR EMPOWERMENT THE DIRECTOR OF INCOME-TAX IN ACTION [ C R E A ] VS. [ EXEMPTION ]; 7MATHURA ROAD JANGPURA : B N E W D E L H I. N E W D E L H I. 110 014. P A N / G I R NO. AAA TC 2961 Q. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI S. D. KAPILA ADV.; & SHRI R. R. MA URYA ADV.; DEPARTMENT BY : SHRI K. RAVI RAMA CHANDARAN SR. D.R.; O R D E R. PER K. D. RANJAN AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER UNDER SECTION 80-G(5)(VI) OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED T O AS THE ACT]. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE REPRODUCED AS UNDER :- 1. THE ORDER OF DIT [EXEMPTION] PASSED UN DER SECTION 80-G(5)(VI) IS BAD IN LAW AND WITHOUT JURISDICTION; 2. THE LD. DIT ERRED IN HOLDING THAT T HE ASSESSEE WAS CHARGING FEE FOR RENDERING SERVICES AND THEREFORE SUCH ACTIVITY IS COVERED BY PROVISO TO SECTION 2(15) INTRODUCED W.E.F. 1/04/2009; 3. THAT THE LD. DIT HAS PASSED THE IMPU GNED ORDER WITHOUT CONSIDERING THE DETAILED EVIDENCE PROVING THAT THE RECEIPTS UNDER T HE HEAD REGISTRATION FEES ARE MINISCULE (RS.1 60 580/- AND NOT RS.3 16 819/- AS T AKEN BY THE DIT [EXEMPTION] FOR FY 2007-08) AS COMPARED TO THE TOTAL EXPENDITUR E AMOUNTING TO 2 I. T. APPEAL NO. 4212 (DEL) OF 2009 RS.33 89 276/- INCURRED BY THE APPELLANT DURING THE YEAR ON BOARDING AND LODGING ETC. OF THE PARTICIPANTS. THAT THIS TOKEN AMOUNT O F REIMBURSEMENT WAS CHARGED FOR ENSURING ATTENDANCE OF THE PARTICIPANTS IN THE WORK SHOPS RUN BY THE ASSESSEE; 4. THAT THE PROVISO TO SECTION 2(15) OF THE ACT IS NOT APPLICABLE IN THE CASE OF THE APPELLANT AS THE APPELLANT DOES NOT AND HAS NEVER INDULGED IN ANY ACTIVITY RELATED TO TRADE COMMERCE OR BUSINESS; 5. THAT THE LD. DIT HAS ERRED IN LAW IN HOLDING THAT THE APPELLANT IS NOT ELIGIBLE FOR EXEMPTION FOR ASSESSMENT YEAR 2009-10 WHICH IS COVERED BY HIS EARLIER ORDER DATED 27/09/2006 AND WAS NOT THE ISSU E BEFORE HIM; 6. THAT THE LD. DIT FAILED TO CONSIDER THE FACT THAT THERE WAS NEITHER ANY CHANGE IN THE OBJECTIVES OF THE SOCIETY NOR WAS THE RE ANY CHANGE IN THE FACTS AND CIRCUMSTANCES TO ATTRACT A REJECTION OF APPLICATION UNDER CLAUSE (VI) OF SUB-SECTION (5) OF SECTION 80-G OF THE ACT; 7. THAT THE ORDER OF THE LD. DIT IS CON TRARY TO THE JUDGEMENT OF JURISDICTIONAL HIGH COURT OF DELHI IN ICAI ACCOUNTI NG RESEARCH FOUNDATION & ORS. VS. DIT (E) REPORTED IN 226 CTR AT PAGE 27; 8. THAT WITHOUT PREJUDICE TO THE ABOVE GROUNDS THE DIT ERRED IN TAKING THE REGISTRATION FEE FOR WORKSHOPS CONDUCTED BY T HE APPELLANT ON THE SAME FOOTING AS FEE IN LIEU OF RENDERING OF SERVICES U NDER PROVISO TO SECTION 2(15) WHEREAS THE TWO RECEIPTS ARE TOTALLY DIFFERENT IN QUALITY; 9. WITHOUT PREJUDICE THE ACTIVITIES O F THE APPELLANT FALL UNDER THE HEAD EDUCATION AND THEREFORE THE LD. DIT (E) WAS NOT CORRECT IN INVOKING PROVISO TO SECTION 2(15). 3. DURING THE COURSE OF HEARING THE LD. AR OF THE A SSESSEE DID NOT PRESS GROUND NOS. 1 AND 9 AND THEREFORE THESE GROUNDS ARE DISMISSED A S NOT PRESSED. 4. THE ONLY ISSUE FOR OUR CONSIDERATION RELATES TO THE ISSUE AS TO WHETHER THE ASSESSEE IS ELIGIBLE FOR CONTINUATION OF REGISTRATION UNDER SEC TION 80-G OF THE ACT. THE ASSESSEE FILED APPLICATION ON 27 TH MARCH 2009 IN FORM NO. 10-G SEEKING CONTINUATION OF REGISTRATION UNDER SECTION 80-G OF THE ACT. THE LD. DIT (EXEMPTION) I SSUED LETTER TO THE ASSESSEE REQUIRING TO SUBMIT A NOTE ON THE ACTIVITIES OF THE TRUST DURING THE LAST THREE YEARS PROOF OF FILING RETURN OF INCOME FOR THE LAST THREE YEARS AND THE OTHER DETAI LS AS MENTIONED IN THE ORDER PASSED BY THE LD. 3 I. T. APPEAL NO. 4212 (DEL) OF 2009 DIT (EXEMPTION) ON 11/09/2009. THE LD. DIT (EXEMPT ION) WHILE EXAMINING THE ACTIVITIES OF THE ASSESSEE NOTED THAT THE ASSESSEE SOCIETY HAD CHARGE D FEE FROM PARTICIPANTS UNDER THE HEAD TECHNICAL AND PROJECT FEES AMOUNTING TO RS.3 16 8 91/-. HE FURTHER NOTED THAT IN FINANCIAL YEAR 2006-07 THE ASSESSEE HAD SHOWN RS.14 98 136=50 UNDE R THE HEAD TECHNICAL AND PROJECT RECEIPTS. THE LD. DIT (EXEMPTION) REFERRED TO TH E DEFINITION OF THE WORD CHARITABLE PURPOSE TO WHICH AMENDMENT WAS BROUGHT WITH EFFECT FROM FINANC IAL YEAR 2009-10 BY INSERTION OF PROVISO. AS PER PROVISO THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVED THE CARRYING ON O F ANY ACTIVITY IN THE NATURE OF TRADE COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVIC E IN RELATION TO ANY TRADE COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATI ON IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION OR RETENTION OF INCOME FROM ANY ACTIVI TY. THE LD. DIT (EXEMPTION) IN VIEW OF THE AMENDED PROVISIONS OF SECTION 2(15) WAS OF THE VIEW THAT THE ACTIVITIES OF THE SOCIETY WERE NO LONGER CHARITABLE FOR FINANCIAL YEAR 2009-10. THER EFORE THE ASSESSEE WILL NOT BE ELIGIBLE FOR REGISTRATION UNDER SECTION 80-G(5) FROM ASSESSMENT YEAR 2009-10 ONWARDS. HE ACCORDINGLY REJECTED THE RENEWAL OF REGISTRATION UNDER SECTION 80-G OF THE ACT. 5. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED T HAT THE ASSESSEE SOCIETY IS NOT ENGAGED IN ANY ACTIVITY OF TRADE OR COMMERCE. THE ASSESSEE IS A CHARITABLE ORGANIZATION. THE ASSESSEES ACTIVITIES ARE DIRECTED AGAINST WOMEN EMPOWERMENT A ND REGULARLY CONDUCTS SEMINARS WHEREIN PARTICIPANTS FROM INDIA AND FOREIGN COUNTRIES PARTI CIPATE. THE ASSESSEE PROVIDES THEM FREE BOARDING AND LODGING. THE ASSESSEE ONLY COLLECTS R EGISTRATION FEE OF RS.500/- FROM INDIAN PARTICIPANTS. WHENEVER ANY FOREIGN PARTICIPANT INS ISTS THE ENTIRE EXPENDITURE IS COLLECTED FROM THEM. THEREFORE IT IS INCORRECT ON THE PART OF TH E DIT (EXEMPTION) TO HOLD THAT THE ACTIVITIES OF THE ASSESSEE WERE HIT BY PROVISO TO SECTION 2(15) O F THE ACT. ON THE OTHER HAND THE LD. [CIT] DR SUPPORTED THE ORDER OF THE LD. DIT (EXEMPTION). 6. WE HAVE HEARD BOTH THE PARTIES. PROVISO TO SECT ION 2(15) OF THE ACT WAS INSERTED BY THE FINANCE ACT 2008 WITH EFFECT FROM ASSESSMENT YEAR 2009-10 ACCORDING TO WHICH THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY SHALL NOT BE CHARITABLE PURPOSE IF IT 4 I. T. APPEAL NO. 4212 (DEL) OF 2009 INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NAT URE OF TRADE COMMERCE OR BUSINESS OR ANY ACTIVITY OR RENDERING ANY SERVICE IN RELATION TO AN Y TRADE COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATION IRRESPECTIVE OF THE NATU RE OF USE OR APPLICATION OR RETENTION OF THE INCOME FROM SUCH ACTIVITIES. IT IS CLEAR THAT CARR YING ON OF ANY ACTIVITY IN THE NATURE OF TRADE COMMERCE OR BUSINESS FOR A FEE OR CESS OR ANY OTHER CONSIDERATION SHALL NOT BE A CHARITABLE PURPOSE WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. THE LD. DIT (EXEMPTION) IN ORDER TO ARRIVE AT HIS DECISION HAS PLACED RELIANCE ON THE F IGURES FOR FINANCIAL YEAR 2006-07 AND FINANCIAL YEAR 2007-08 WHEREAS AMENDED PROVISIONS ARE APPLIC ABLE WITH EFFECT FROM 1/04/2009. THEREFORE BENEFIT OF SECTION 2(15) OF THE ACT WILL BE DENIED IF ANY ACTIVITY OF THE ASSESSEE IS IN THE NATURE OF TRADE COMMERCE OR BUSINESS WITH EFFE CT FROM ASSESSMENT YEAR 2009-10. THE LD. DIT (EXEMPTION) HAS NOT EXAMINED THE FIGURES FOR RE LEVANT PERIOD I.E. FINANCIAL YEAR 2008-09. THE LD. AR OF THE ASSESSEE SUBMITTED THAT WHEN APPL ICATION FOR CONTINUATION OF REGISTRATION WAS MADE THE ACCOUNTS FOR FINANCIAL YEAR 2008-09 WERE NOT AVAILABLE. HOWEVER AS ON TODAY THE ACCOUNTS ARE AVAILABLE WITH THE ASSESSEE. WE THER EFORE SET ASIDE THE MATTER TO THE FILE OF THE LD. DIT (EXEMPTION) WITH THE DIRECTIONS TO EXAMINE THE ACTIVITIES OF THE ASSESSEE IN THE LIGHT OF ACCOUNTS FOR FINANCIAL YEAR 2008-09. THE LD. DIT ( EXEMPTION) WILL ALSO DECIDE WHETHER THE ACTIVITIES UNDER THE HEAD TECHNICAL PROJECTS ARE IN THE NATURE OF TRADE COMMERCE OR BUSINESS. THE LD. DIT (EXEMPTION) WILL DECIDE THE ISSUE FOR G RANT OF REGISTRATION AFTER AFFORDING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 31 ST MARCH 2011. SD/- SD/- [ C. L. SETHI ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : _31 ST MARCH 2011 . *MEHTA * 5 I. T. APPEAL NO. 4212 (DEL) OF 2009 COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT (APPEALS) 5. DR ITAT NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR ITAT. 6 I. T. APPEAL NO. 4212 (DEL) OF 2009